Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network. I’m delighted to be joined from Singapore by renowned hedge fund investor and financial markets expert, Jim Rogers, to talk about what’s expected from global financial markets in 2017. Jim, welcome to FNN and thanks for joining us.

Jim Rogers: I’m delighted to be here Carolyn, I’m a fan.

Carolyn Herbert: Thank you Jim. First up - global stock markets have rallied since the election of President Donald Trump in November 2016. So do you think this response is justified?

Jim Rogers: Well Mr Trump has said a lot of good things and the central banks around the world have printed a lot of money. So if you put easy money and lots of money together with good promises. Sure it’s great – if he does what he says, the good things, we’re all going to have a wonderful time for a while.

Carolyn Herbert: But Jim, you are positioning yourself for a ‘global financial meltdown’ should Mr Trump fail to fulfill his promises, so what is your timeframe there?

Jim Rogers: Well it depends on Mr Trump, it could be today. He promised many, many times a 45 per cent tariff on China the first day, that he would name them a currency manipulator, and that he would have a trade war with Mexico, Japan and Korea. It has been two months and he hasn’t done any of these things. So you have to ask him, I don’t know, maybe he’s just a politician who says what he wants to and then does something else. Nobody has ever won a trade war, and they always end up disastrous for everybody and not just the people involved.

Carolyn Herbert: So in times of financial turmoil Jim, the US dollar and gold have traditionally been seen as ‘safe haven assets’ so are there any other commodities or sectors investors should be seriously considering?

Jim Rogers: Well, agriculture – if we are going to have chaos and disaster, being a farmer is one of the best things you can do. I own a lot of US dollars because I’m expecting problems. In the end, the safest safe haven is agriculture. Have a farm and learn how to be a farmer, but I don’t have a farm because I would not be a good farmer.

Carolyn Herbert: (laughs) Well as you say Jim, you hold a lot of the US dollar, so what is your outlook for the Greenback?

Jim Rogers: I own a lot of US dollars, Carolyn. People look for a safe haven in times of turmoil. The US dollar is not a safe haven but people think it is because of historical reasons. The US is now the largest debtor nation in the history of the world, but I own a lot of them because turmoil is coming. The dollar will go higher, it might get overpriced, it might turn into a bubble. I hope I’m smart enough to sell at that point.

Carolyn Herbert: Jim, you’ve also previously spoken about how you like the energy space. Is oil something people should be looking at?

Jim Rogers: Well energy is making a complicated bottom. You’ve got to look back a year or two and see that in 2015/16/17, oil prices made their low. I expect another drop down before it makes that low. But at that point, people should probably buy energy because the known reserves of oil continue to decline, except for fracking. Most fracking cannot make money unless prices are much higher.

Carolyn Herbert: A bit of a change of topic Jim, turning to interest rates. The US Fed have indicated they are going to raise rates twice again this year. What’s your view on that?

Jim Rogers: Interest rates are certainly going higher but I look at the market more than I look at the Fed. The Fed has basically always followed the market, but interest rates will go higher one way or another. Now Carolyn, when problems start arising again, the Fed is going to panic and cut rates or print money because they don’t know what they’re doing. They’re bureaucrats and academics; they’ve never gotten it right.

Carolyn Herbert: Aside from the Federal Reserve in the spotlight, 2016 was a tumultuous year for Global Financial Markets with events such as Brexit and the election of President Donald Trump, so what events should we be aware of for 2017?

Jim Rogers: You should be prepared for lots of things. Carolyn, you have a lot of job security because there is going to be so much going on in the world, somebody’s got to report it. There are going to be bankruptcies, turmoil, election surprises in Germany, France, other places, so you’re at the right place. They need journalists and reporters now.

Carolyn Herbert: Well that’s very good to know. So we are more than a quarter of the way through 2017, how do you think President Trump will perform for the rest of the year?

Jim Rogers: Well if Mr Trump starts trade wars, the whole world’s going to collapse, Carolyn. I mean that’s it – it’s over. History is very clear about that. If he does the other things – cuts taxes, builds infrastructure, brings the money back to the US, gets rid of regulations – the market will like it and the market will go up for a while. I wouldn’t say more than a few months but it would certainly go up for a while. But if he starts all of those other things that he promised us he would do, you should be very worried.

Carolyn Herbert: That’s definitely something we should be watching out for. Jim Rogers, thank you very much for joining us. It’s been an absolute pleasure.

Finance News Network
Carolyn joined FNN in August 2015 as the Head of News and also presents the Market at Midday and the Market Wrap. With more than five years of broadcast journalism experience, Carolyn has worked as a finance anchor on the Sky News Business channel and as an anchor and reporter for ABC News. She is also a qualified corporate lawyer specialising in IPOs, takeovers and mergers and acquisitions.